Direct Purchase Program

DEFINITION of 'Direct Purchase Program'

A direct purchase program is a method by which individuals can buy stock in a company directly from that company. The advantage of a direct purchase program is that there is no need to pay any broker fees or commissions. The majority of big corporations offer direct purchase programs as a way of encouraging investment.

BREAKING DOWN 'Direct Purchase Program'

Direct purchase programs differ from company to company. These programs are required to comply with complex federal and state securities laws, which can impose various restrictions and eligibility requirements for investors wishing to acquire stock in this manner. This rise of low-cost brokerage services has caused this method of commission-free purchasing to decline in popularity.

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RELATED FAQS
  1. How can I purchase stocks directly from a company?

    There are a few circumstances in which a person can buy stock directly from a company. The following is meant to cover some ... Read Answer >>
  2. Do I always need to use a stock broker?

    Do I need a stock broker to buy stocks for myself, even if I get a stock brokers license? Or is there a rule that makes it ... Read Answer >>
  3. What is the cost of a share purchase?

    Find out how the total price of a share purchase is dictated by the current stock price and the fees the brokerage company ... Read Answer >>
  4. Are my transferred stocks subject to capital gains tax?

    I held stocks in company A that was purchased by company B. As a stock holder, I received cash and stocks in what is now ... Read Answer >>
  5. What is the smallest amount of shares I can buy?

    Understand the steps needed for an investor to open a brokerage account and make a trade. Learn what the smallest amount ... Read Answer >>
  6. Is a Canadian resident allowed to participate in a direct stock purchase plan from ...

    There is no law that prevents Canadians from participating in direct stock purchase plans offered by U.S. companies. There ... Read Answer >>
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